Final Liquidity Rule on NCUA Board Agenda

The NCUA’s final liquidity rule is on the agenda of its upcoming Oct. 24 monthly board meeting.

Under the proposed “Maintaining Access to Emergency Liquidity” rule, federally insured credit unions with $10 million or more in assets must develop “a contingency funding plan that clearly sets out strategies for addressing liquidity shortfalls in emergency situations.”

“The NPRM requires FICUs with less than $10 million in assets to maintain a basic written policy that provides a board-approved framework for managing liquidity and a list of contingent liquidity sources that can be employed under adverse circumstances,” the proposed rule said.

Credit unions with more than $100 million in assets would also be required to establish the ability to borrow from the CLF or Federal Reserve in case of a liquidity emergency. Credit union trade associations have pushed for the Federal Home Loan Banks to be included on the list of acceptable emergency liquidity choices.

The agenda also includes a proposed rule described as “Credit Union Capital Planning and Stress Testing.” The NCUA clarified the rule will not be one that requires risk-based capital for credit unions.